Social Security: A-02-03-13034

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SOCIAL SECURITY

Inspector General

SOCIAL SECURITY ADMINISTRATION BALTIMORE MD 21235-0001

November 15, 2002

The Honorable Jo Anne B. BarnhartCommissioner

Dear Ms. Barnhart:

In November 2000, the President signed the Reports Consolidation Act of 2000(Public Law No. 106-531), which requires Inspectors General to provide a summary andassessment of the most serious management and performance challenges facingFederal agencies and the agencies’ progress in addressing them. This documentresponds to the requirement to include this statement in the Fiscal Year (FY) 2002

Social Security Administration's Performance and Accountability Report .

In October 2001, we identified the following 10 significant management issues facingthe Social Security Administration (SSA) for FY 2002.

· Fraud Risk · Performance, Management and DataReliability

· Improper Payments · Management of the Disability Process

· Systems Security · Integrity of the Earnings Reporting

Process

· Service Delivery · Social Security Number Misuse andPrivacy Concerns (Identity Theft)

· Human Capital · Integrity of the Representative PayeeProcess

In FY 2002, SSA continued its efforts to address these issues, many of which are of along-term nature and do not lend themselves to quick fixes. Our assessment of thestatus of these 10 management challenges is enclosed.

Sincerely,

James G. Huse, Jr.

Enclosure



Inspector General Statement

on the

Social Security Administration’s

Major Management Challenges

A-02-03-13034

NOVEMBER 2002



Mission

We improve SSA programs and operations and protect them against fraud, waste,and abuse by conducting independent and objective audits, evaluations, andinvestigations. We provide timely, useful, and reliable information and advice toAdministration officials, the Congress, and the public.

Authority

The Inspector General Act created independent audit and investigative units,

called the Office of Inspector General (OIG). The mission of the OIG, as spelledout in the Act, is to:

m Conduct and supervise independent and objective audits andinvestigations relating to agency programs and operations.

m Promote economy, effectiveness, and efficiency within the agency.m Prevent and detect fraud, waste, and abuse in agency programs and

operations.m Review and make recommendations regarding existing and proposed

legislation and regulations relating to agency programs and operations.m Keep the agency head and the Congress fully and currently informed of

problems in agency programs and operations.

To ensure objectivity, the IG Act empowers the IG with:

m Independence to determine what reviews to perform.m Access to all information necessary for the reviews.m Authority to publish findings and recommendations based on the reviews.

Vision

By conducting independent and objective audits, investigations, and evaluations,

we are agents of positive change striving for continuous improvement in theSocial Security Administration's programs, operations, and management and inour own office.



IG Statement on SSA’s Major Management Challenges 1

Fraud Risk

Fraud is an inherent risk in all of the Social Security Administration’s (SSA) corebusiness processes: enumeration, earnings, claims, and post-entitlement. All of theseprocesses include vulnerabilities that provide individuals the opportunity to defraud third

parties, SSA, or its beneficiaries and recipients. As SSA payments to beneficiariesapproach half a trillion dollars annually, its exposure to fraud increases proportionately.Our focus on fraud risk is based on program eligibility factors that individualsmisrepresent to attain or maintain eligibility.

SSA’s difficulties in monitoring eligibility factors for Supplemental Security Income (SSI)recipients is a key reason the SSI program has remained on the General AccountingOffice’s (GAO) list of high-risk Federal programs since 1997.1 Because the SSIprogram is means-based, it includes eligibility factors that tend to be more difficult for SSA to verify and monitor, including income, resources, living arrangements, residency,and deemed income. While SSA is addressing the factors affecting the complexity of

the SSI program, the Agency still relies on self-reporting of income, living arrangements,and medical improvement in determining whether an individual is eligible for SSIpayments. Examples of the eligibility factors susceptible to fraud under the Old-Age,Survivors and Disability Insurance (OASDI) program include family relationships (for dependents and survivors), school attendance (for children age 18 and older), and childin-care (for surviving spouses under age 60). Other key risk factors common to bothprograms are the reporting of beneficiary and recipient deaths and monitoring of medical improvements for disabled individuals.

SSA Has Taken Steps to Address this Challenge

SSA has taken an active role to address the integrity of the OASDI and SSI programsthrough its “zero tolerance for fraud” initiative. This initiative involves various activities.In addition to increasing resources for the Office of the Inspector General (OIG), SSA’sOffices of Operations and Disability, in conjunction with the OIG, formed 17 CooperativeDisability Investigation (CDI) teams by Fiscal Year (FY) 2002. These teams rely on thecombined skills and specialized knowledge of OIG investigators, State and local lawenforcement officials, and SSA and Disability Determination Services (DDS) personnelto combat disability fraud. During FY 2002, CDI teams prevented over $62.9 million inimproper payments.

SSA continues to identify and terminate payments to incarcerated beneficiaries. SSA

has agreements with 5,559 correctional facilities that encompass over 99 percent of theinmate population. SSA estimates the suspension of payments to prisoners saved theOASDI and SSI programs $500 million in FY 2002.

1 In 1997, GAO designated the SSI program as high-risk since SSA lacked an effective plan to addressthe level of debt that results from overpayments. As a result, SSA developed a corrective action plan,which was updated in June 2002, to remove the SSI program from GAO’s high-risk list.




In addition, SSA has taken steps to improve the SSI program, including a correctiveaction plan with the goal of removing the SSI program from GAO’s high-risk list. As partof this effort, SSA has initiated computer matches to identify unreported wage andunemployment compensation, and real time access to external databases. For instance, SSA has obtained on-line query access to selected records in 68 agencies in

40 States. SSA estimated these efforts would save $5 million in FY 2002. SSA hasalso implemented new computer matches by field office staff to identify recipient incomebefore awarding SSI payments. This program provides direct access to Office of ChildSupport Enforcement (OCSE) databases related to wages, new hires, andunemployment insurance.

SSA Needs to Continue to Address this Challenge

SSA needs to further address the risk of fraud in the areas of detecting beneficiarydeaths, fugitive felons, and unreported income. A significant tool against fraud risk isthe detection of unreported beneficiary and recipient deaths. However, our audit work

has disclosed that SSA needs to strengthen the effectiveness of this detection tool.SSA relies on its Death Alert, Control, and Update System (DACUS) to identify and

terminate payments after a beneficiary’s death. Our June 2001 audit report, Old-Aged ,Survivors and Disability Insurance Benefits Paid to Deceased Auxiliary Beneficiaries(A-01-00-20043), disclosed that 881 auxiliary beneficiaries were paid about $31 millionafter their dates of death through December 2000 because DACUS could not properlymatch their records. Another audit issued in September 2002, Effectiveness of theSocial Security Administration’s Death Termination Process (A-09-02-22023), disclosedthat, based on a random sample of 200 DACUS alerts, SSA disbursed about$142.4 million in payments after death during Calendar Year 1999. Of this amount,SSA had not recovered about $5.4 million as of March 2002.

Another area that is susceptible to fraud risk is payments to unidentified fugitive felons.Our investigative efforts under the Fugitive Felon Program have identified65,857 fugitives who were overpaid more than $137.4 million from August 1,1996through March 31, 2002. Of the 65,857 fugitives, 6,984 were arrested, and weestimated the related savings to be about $213 million for the SSI program. While SSAhas made progress in obtaining fugitive data, more work remains in this area. We haverecommended that SSA pursue legislation to prohibit the payment of OASDI benefits tofugitives. We estimate that fugitives continue to receive at least $39 million annually inOASDI benefits.

As GAO noted in its September 2002 report, Supplemental Security Income: Progress

Made in Detecting and Recovering Overpayments, but Management Attention Should Continue ( GAO-02-849), it is too soon to tell what impact a number of SSA’s initiativesto strengthen the integrity of the SSI program will have. GAO also made severalrecommendations aimed at further strengthening SSA’s ability to deter, detect andrecover SSI overpayments, including reexamining policies and procedures for SSIoverpayment waivers.




Improper Payments

Improper payments are a major management challenge since even the slightest error inSSA’s overall process can result in millions of dollars of OASDI and SSI over- or under-payments. Allegations of individuals obtaining improper payments from SSA programs

have recently been the subject of media reports, congressional hearings, and legislativeactions. Also, in August 2001, the Office of Management and Budget (OMB) publishedThe President’s Management Agenda, FY 2002 , which includes a Government-wideinitiative for improving financial performance and reducing improper payments.Improper payments are defined as payments that should not have been made or thatwere made for incorrect amounts. Examples of improper payments include paymentswith inadvertent errors, for unsupported or inadequately supported claims, for servicesnot rendered, to ineligible beneficiaries, and resulting from fraud and abuse by programparticipants and/or Federal employees.

The risk of improper payments increases in programs with (1) a significant volume of

transactions, (2) complex criteria for computing payments, and/or (3) an emphasis onexpediting payments. SSA faces all three of these risks. Specifically, the Agency isresponsible for issuing timely benefit payments for complex entitlement programs to50 million individuals. Also, SSA’s purpose—providing Social Security benefits toretired and disabled workers; as well as providing SSI payments to financially needyindividuals who are aged, blind, or disabled—emphasizes expediting payments.


SSA has actively sought to identify actions to reduce improper payments and/or recover amounts overpaid. Specifically, SSA has been working to improve its ability to prevent

overpayments by obtaining beneficiary information from independent sources sooner and/or using technology more effectively. For instance, SSA has initiated new computer matching agreements, obtained on-line access to wage and income data, andimplemented improvements in its debt recovery program.

According to SSA’s June 2002 Corrective Action Plan for the SSI Program, “…SSIoverpayment collections are 33 percent higher since FY 1998, and detections are32 percent higher.” Additionally, SSA is focusing on initiatives that have provenpotential in preventing overpayments, rather than merely detecting additionaloverpayments. For example, for FY 2002 SSA estimates that matching wage data fromOCSE would result in an estimated $110 million in improper payment savings, and

identifying nursing home admissions would result in estimated savings of $20 million.Further, SSA planned to perform SSI redeterminations on one of every three SSIrecipients in FY 2002, and was requesting funds to increase the number of redeterminations in FY 2003.





Some improper payments are inevitable because SSA is not permitted to stop or adjustpayments until due process related to the beneficiary’s right to appeal an action iscompleted. 2 Also, SSI payments are paid at the beginning of the month under the

assumption that the recipient’s circumstances (such as income and asset levels) willremain the same during the month for which payment is rendered. However, SSAneeds to continue pursuing all cost-effective avenues to identify, recover, and preventthose improper payments that are not inevitable.

Improper payments, including those to deceased beneficiaries, students, and individualsreceiving State workers’ compensation benefits, continue to drain the Social SecurityTrust Fund and general Federal funds. For example, based on SSA’s own study after our 1998 and 1999 audits on benefits involving workers’ compensation, the Agencyestimated that the total past and future errors for two subsets of our workers’compensation population could reach $1.3 billion in under- and overpayments. Another

example of continued attention in this area pertains to our October 2002 report3

onbenefit payments after death—where we estimated $12 million in Social Security fundswere improperly paid.

In addition to our own work, both the Social Security Advisory Board (SSAB) and GAOcontinue to recognize improper payments as a management challenge for SSA. TheSSAB’s March 2002 report, SSA’s Obligation to Ensure that the Public’s Funds areResponsibly Collected and Expended , concluded that SSA should be moving muchmore effectively and aggressively to collect overpayments if it is to properly dischargeits stewardship responsibilities. Also, GAO has testified before Congress and issued anumber of reports in FY 2002 on the need for improvement in the SSI program in

relation to improper payments.

4

2

42 USC 423(g).

3 Old-Age, Survivors and Disability Insurance and Supplemental Security Income Payments to Deceased Beneficiaries and Recipients (A-06-02-12012), October 30, 2002.

4 GAO Testimony, Supplemental Security Income: Status of Efforts to Improve Overpayment Detectionand Recovery (GA-02-962T), July 25, 2002. GAO Report, Financial Management: Coordinated ApproachNeeded to Address the Governments Improper Payments Problems (GAO-02-749), August 2002. GAOReport, Supplemental Security Income: Progress Made in Detecting and Recovering Overpayments, But Management Attention Should Continue (GAO-02-849), September 2002.




Systems Security

As technology advances and our reliance on technology increases, the need for astrong information infrastructure becomes even more important. Along with the

explosive growth in computer interconnectivity comes the ability to disrupt or sabotagecritical operations, read or copy sensitive data, and tamper with critical processes.Those who wish to disrupt or sabotage critical operations have more tools than ever.

Presidential Decision Directive 63, issued in 1998, requires Federal agencies to identifyand protect their critical infrastructure and assets. One of SSA’s most valuable assetsis the information it has been assigned to use to complete its mission. SSA is relying ontechnology to meet the challenges of ever-increasing workloads with fewer resourcesand rising customer expectations. A physically and technologically secure Agencyinformation infrastructure is a fundamental requirement.


SSA’s current information security challenge is to understand system vulnerabilities andhow to mitigate them. SSA must ensure its critical information infrastructures, such asthe Internet and access to the networks, is secure. By improving systems security andcontrols, SSA will be able to use current and future technology more effectively to fulfillits customers’ needs.

SSA has addressed critical information infrastructure and systems security in a varietyof ways. It created a Critical Infrastructure Protection work group that continually workstoward compliance with Presidential Decision Directive 63. The work group has createdseveral components Agency-wide to handle systems security, and has begunvulnerability analyses of what have been identified as its most critical assets. SSA alsoroutinely sends out security advisories to its staff and has hired outside contractors toprovide expertise in this area—including benchmarking the strength of its securityprogram relative to other organizations.


To further strengthen its controls to protect SSA information and systems and preparefor further challenges, SSA needs to address the following issues.

· Weaknesses in SSA’s overall information protection control structure identified byPricewaterhouseCoopers, including (1) improving physical access controls at non-Headquarters locations, including SSA’s regional offices, program service centers,

and selected DDSs; (2) implementing and monitoring of technical securityconfiguration standards governing systems housed in the National Computer Center and off-site house systems; and (3) monitoring security violations and periodicreview of user access.

· Need to more clearly define and report on all systems and subsystems to improveAgency-wide coordination and implementation of systems security.




· Internal control weaknesses that provide opportunity for unauthorized access tosensitive information.

· Limited review and analysis of system intrusion data performed at SSA facilities.

·

Risks associated with providing customer service over the Internet that includeauthenticating individuals when receiving their information.




Service Delivery

SSA is faced with increased workloads brought about by an aging Baby-boomgeneration, a projected retirement wave and other attrition through 2010 of over half of its workforce, and technological advances that affect both citizens’ expectations and

SSA’s ability to meet them. While SSA is committed to providing, world-class serviceand has an established reputation for quality service, maintaining this service will be amajor management issue facing SSA as workloads continue to increase, large numbersof employees retire, and service expectations rise.


SSA has recognized the challenges it faces in maintaining quality service delivery andhas developed a long-term Service Vision. This 10-year plan is based on the premisethat the convergence of the forecasted trends will provide SSA with the opportunity to(1) reshape its business processes, (2) reform its management of technology, and

(3) deliver the service the American public demands. SSA will rely on electronicgovernment (E-government) solutions to increase its productivity and allow it to bridgethe resource gap that will be created by the expected explosive growth in its workloads.Key activities SSA is implementing to support these goals are providing (1) individualsaccess to one-stop shopping with single-points-of-entry, such as via the Internet or automated telephone service; (2) business partners the opportunity to switch from paper and magnetic tape to the Internet for the earnings reporting process; and (3) informationsharing with Federal and State government partners to serve the American publicbetter. Additionally, SSA continues to implement its Future Workforce Plan, as wediscuss under the Human Capital Management Challenge.


While SSA met most of its goals related to service in FY 2002, it should continuallyexplore innovative ways to address service delivery problems to maintain existingservice levels. As the SSAB reported, SSA has already—and should expect to continueto provide —uneven service. While those filing for retirement or survivor benefits arelikely to be satisfied with the service provided, individuals with complicated cases—suchas Disability Insurance (DI) or SSI—may encounter problems. As workloads increase,the dimensions of SSA’s problems can be expected to grow. If these challenges are leftunattended, the public will be faced with crowded reception areas, long waiting times,inadequate telephone service, and reduced quality of work.

SSA is facing some daunting challenges to provide world-class service that it mustimmediately address. One is an incredible swell in workload volumes. Beginningaround 2008, the 76 million “baby boomers” will begin to move into their disability-proneyears and begin to retire. SSA anticipates that by 2010, applications for DI will increaseby as much as 32 percent over 2000 levels and applications for retirement benefits by31 percent over 2000 levels. Along with this workload increase, demands for the wayservices will be delivered are also expected to change, with citizens wanting differentmodes of accessibility. For example, the public will want to use the Internet and “one-




stop shopping” for access to services and programs through one interaction with theGovernment. Future service delivery challenges include providing customers electronicservices over the Internet and telephone, 24 hours a day, 7 days a week. It will be thenorm for business transactions to be processed electronically at the first point of contact. Due to the critical importance of this issue, Expanded E-government was

included as a Government-wide initiative in The President’s Management Agendaissued August 2001. The Agenda stated that “The federal government can securegreater services at lower cost through E-government, and can meet high public demandfor E-government services”.

Further, in May 2002, GAO testified5 that SSA’s future success in managing workloadsand meeting customer demands is linked to effectively managing informationtechnology initiatives. While SSA’s vision is to rely heavily on technology, GAO notedweaknesses in how SSA would successfully manage and meet the goals it hasestablished. Some of the weaknesses included the following.

·

Investment proposals may not provide the most cost-effective solutions and achievemeasurable and specific program-related benefits—ensuring high-quality servicedelivered on time, within cost, and to the customer’s satisfaction.

· Internet and web-based customer environments are not aligned with the Agency’sinformation technology environment —ensuring key elements to deliver service arealigned with SSA’s information technology environment.

· Improvements in customer service dependent on software-intensive systems—ensuring that SSA delivers quality software on schedule and within cost estimates.

To address these challenges, the Commissioner initiated a new emphasis on qualitythat seeks to balance five elements: accuracy, timeliness, productivity, cost, andcustomer service. To accomplish these challenges, the Commissioner is taking actionto place the resources where they are needed to do the job right the first time. SSAalso plans to rely heavily on information technology. However, both GAO and we havereported that some of the Agency’s past experiences have shown mixed success. SSAwill need to continually focus on these important challenges.

5 GAO Testimony, Social Security Administration: Agency Must Position Itself Now to Meet Profound Challenges (GAO-02-289T), May 2, 2002.






not enough staff to accomplish all mandated tasks. The report further noted that SSAhad appointed a work group to identify workloads in field offices that are underfunded.The objective was to develop short-term tools for identifying these workloads so theywould be considered when the budget is formulated. SSAB also noted that this type of analysis was important to the credibility and usefulness of the Agency’s budget

submissions.

Although SSA has taken initiatives to address its human capital challenge, many actionsstill need to be refined and then successfully carried out. For instance, as part of itseffort to increase new hire retention, SSA began a study of why new hires leave. Thisstudy will need to be analyzed to determine options SSA can take to meet its goals of increasing retention rates. Similarly, SSA is relying on desktop video training as animportant aspect of its program to maintain a skilled workforce; however, this initiative isstill in prototype stage, and its success will depend on future funding. SSA will need tocontinually monitor the effects of these actions and be able to quickly respond tochanging employee and client service needs.




Performance, Management and Data Reliability

To effectively meet its mission, manage its programs, and report on its performance,SSA needs sound performance and financial data. Congress, the general public, andother interested parties also need sound and credible data to monitor and evaluate

SSA’s performance. The President’s Management Agenda has placed great emphasison the management and performance of Federal agencies, including the integration of budget and performance. SSA has demonstrated a strong commitment to theGovernment Performance and Results Act of 1993 (Public Law No. 103-62) bydeveloping strategic plans, annual performance plans and annual performance reports.However, we believe SSA can further strengthen its use of performance information byfully documenting the methods and data used to measure performance and byimproving the data sources that appear to be unreliable.


Our audits and reviews of SSA’s financial statements, annual performance plans andreports, and individual performance measures disclosed that SSA has demonstratedcommitment to the production and use of reliable performance and financialmanagement data. SSA is the only Federal agency to receive the Certificate of Excellence in Accountability Reporting for its Performance and Accountability Report every year since the award program began for FY 1998.

SSA has continually refined its annual performance plans to develop performancemeasures that more accurately reflect performance and are more outcome-based. InFY 2002, SSA revamped its Tracking Report used by Agency executives to manage keyworkloads at the national level and made it available to all employees on-line. The

revised report tracks key FY 2002 performance measures and provides alerts as towhether performance is significantly different from the goals established. SSAdescribes its progress in meeting annual performance goals in its performance andaccountability reports. SSA took action to address some of the issues we noted couldbe improved or for which the reliability of the data was questionable. For instance, SSAagreed to review the hearings process from initial in-take through input into the HearingOffice Tracking System after we reported the data from this system were unreliable.


Our audits of 21 performance measures in FY 2002 found the data for 16 of themeasures reviewed were reliable. We were unable to issue an opinion for five of themeasures because the data or documentation of the methods used to measure SSA’sperformance was not available. We have generally found, even for the performancemeasures found to be reliable, that SSA lacks documentation of the methods and dataused to measure its performance.

SSA needs to have performance goals and measures that address the major management challenges facing the Agency. While the FY 2002 annual performance




plan discussed SSA’s approach to addressing its major management challenges,performance measures were not established for all the challenges, such as theEarnings Suspense File and the integrity of the representative payee process.

SSA could also improve the extent to which performance measurement is outcome

(results) based. The continual reliance on multiple output performance measuresmakes it difficult to judge the performance of some of SSA’s program and key activities.SSA needs to continue focusing its efforts on developing high-quality, outcome-basedperformance indicators and goals for each of its programs and activities.

SSA also needs to further develop a cost accounting system to better link costs withperformance. Since most goals are not aligned by budget account, the resource,human capital, and technology necessary to achieve many performance goals are notadequately described. SSA began to implement a cost accounting system in FY 2002,which will be phased in over the next 3 to 4 years.




Management of the Disability Process

Management of the disability process is a major management challenge for which SSAhas established various initiatives to improve processing times and productivity;however, its success has been mixed. SSA administers two programs providing

benefits based on disability: DI and SSI. Most disability claims are initially processedthrough SSA field offices (FO) and DDS offices. SSA’s FO staff are responsible for obtaining applications for disability benefits and verifying non-medical eligibilityrequirements, which may include age, employment, or marital status information. TheFO sends the case for a disability evaluation to a DDS, which is a State agency or other responsible jurisdiction funded by SSA to develop medical evidence and render theinitial determination on whether the claimant is legally disabled or blind. In FY 2002,2,376,572 initial disability claims were processed, with an average processing time of 104 days. SSA’s goal was to process 2,191,000 initial disability claims, with an averageprocessing time of 115 days.

If a claimant is not satisfied with a DDS’ decision, the individual may file an appeal. TheOffice of Hearings and Appeals is responsible for holding hearings and issuingdecisions at two distinct stages in SSA’s appeals process—in hearing offices and at theAppeals Council. Administrative law judges hold hearings and issue decisions inhearing offices nationwide. In FY 2002, hearing offices processed 532,106 cases, andthe average time a claimant waited for a decision on an appeal was 336 days. SSA’sgoal was to process 490,000 cases, with an average processing time of 330 days. TheAppeals Council is the final level of administrative review for claims filed under SSA’sdisability programs. The Appeals Council reviews administrative law judges’ decisionsand dismissals upon the claimant’s request for review. In FY 2002, SSA’s goal was toprocess Appeals Council cases with an average processing time of 285 days; actual

average processing time was 412 days.


SSA has tested several improvements to the disability claims process as a result of concerns about the timeliness and quality of its service. These improvement initiativeshave been piloted over the last few years and include all levels of eligibilitydeterminations beginning with DDSs and continuing through the hearings and appealsprocesses.

Recognizing the lack of significant improvements to the disability determination process

time, the Commissioner in FY 2002 announced several decisions on the future of SSA’sdisability process. The Commissioner’s decisions included expanding the Single-Decision Maker nationwide, ending the requirements for the claimant conference,evaluating the elimination of the reconsideration level of the claims process nationwide,making additional improvements to the hearings process, and implementing an e-Dib(electronic disability initiative) by 2003.





SSA needs to continue its focus on improving the disability process. SSA met three,partially met one, and failed to meet one of its seven disability-related performancegoals contained in its FY 2002 performance report. Further, data was not available to

measure performance for two other goals. Particularly troublesome is the hearings andappeals process. SSA met two of its eight goals related to the hearings and appealsprocess, failed to meet five, and the data was not available for one. The disabilityprocess continues to be a serious concern given the level of resources SSA hasdevoted to its disability process improvement initiatives and the lack of substantialimprovement to date.

During FY 2002, we reviewed the status of five of SSA’s Disability ProcessImprovement Initiatives: Prototype, Quality Assurance, Disability Claims Manager,Process Unification, and Hearings Process Improvement. We found that PrototypeDDSs, DDSs that implemented one or more improvement initiatives, were falling behind

in providing timely customer service as processing time at the initial level increased,productivity decreased, and the backlog of cases grew at the DDSs and Office of Hearings and Appeals. In addition, preliminary data from the Prototype raisedquestions about the program costs of national implementation. We also found that theHearings Process Improvement initiative did not result in significant improvements inprocessing times and resulted in decreased productivity. Furthermore, SSA has notfully developed a plan for a more comprehensive and uniform quality assurance system,which is critical to disability claim adjudication.




Integrity of the Earnings Reporting Process

SSA’s Earnings Suspense File (ESF) represents a major management challengebecause its size and rate of growth may impact the calculations of beneficiaries'benefits, results in higher administrative costs, and represents a sizeable portion of

Social Security number (SSN) misuse.

The integrity of SSA’s process for posting workers’ earnings is critical to ensuringeligible individuals receive the full retirement, survivor, and/or disability benefits duethem. The ESF primarily consists of reported earnings for which the name and SSNcombination does not match validation criteria within SSA’s systems. Each year, SSAreceives about 21 million wage items that have invalid name and SSN combinations.Through extensive computer matches and manual efforts, this number is reduced toabout 6.5 million items, annually. However, about 1 percent of the earnings reportedannually cannot be posted to earners' accounts and accumulates in the ESF. BetweenTax Years (TY) 1937 and 2000, the ESF grew to about $374 billion in wages,

representing approximately 236 million wage items.

The ESF is further indicative of a nation-wide problem of potential fraud and misuse thatnot only affects SSA’s programs, but also that of other Federal agencies—such as theInternal Revenue Service (IRS) and the Immigration and Naturalization Service (INS).The IRS uses wage data to enforce tax laws and can penalize employers andemployees for providing incorrect information. The INS has oversight responsibility for unauthorized noncitizens. The Immigration Reform and Control Act of 1986 (Public LawNo. 99-603) made it illegal for employers to knowingly hire or continue to employunauthorized noncitizens. Employers must request that newly hired employees presentdocuments that establish their identities and eligibility to work.


SSA has several initiatives to reduce the ESF’s size and rate of growth. For example,SSA is piloting an on-line system called the SSN Verification System—a projectdesigned to assist employers in verifying new hire names and SSNs. This pilot expandsthe current Employee Verification Service (EVS) for registered employers—a paper andmagnetic media process. In addition, in TY 2001 SSA expanded its correspondencewith employers when the name and/or SSN submitted did not match SSA's records.Employers were asked to obtain and provide corrected wage information. Finally, SSAis evaluating the results of two other pilot projects that used the databases of other Federal agencies to assist employers in verifying employees’ names and SSNs.However, the success of many of these projects and pilots depends on the collaborationwith and support from other agencies—such as the IRS, INS, and OCSE.

SSA has also developed other processes to validate the earnings data in the Master Earnings File. SSA recently started mailing Social Security statements to individualswho had earnings and were age 25 or older. In FY 2002, SSA mailed almost138 million of these statements. However, over 12 million were returned to SSA as




undeliverable. If an individual contacts SSA about missing earnings, these amounts areeither reinstated from the ESF to the Master Earnings File—if they are in the ESF—or added as new earnings to the Master Earnings File.


We commend SSA for its efforts, but several factors—both internal and external toSSA—hinder the efforts with the most potential to reduce the ESF’s size and growth.Some of the internal factors include a higher priority placed on other automated systemdevelopments and the fact that SSA has not linked available information in its databaseto identify chronic “problem” employers who continually submit annual wage reports withmultiple errors. External factors include other Federal agencies with separate yetrelated mandates, such as the IRS's failure to sanction employers for submitting invalidwage data7 and the INS' complicated employer procedures for verification of eligibleemployees. Further, SSA acknowledges the suspense file most likely will grow astransient workers in certain industries increase.

Recent OIG reviews have found SSA needs to improve communications with employersif it expects to improve the accuracy of reported wages. For example, our August 2002review, Effectiveness of the Social Security Administration's Earnings after DeathProcess, found that SSA's earnings after death edit was not effective in resolving TY1998 suspended earnings items. While SSA reinstated approximately 6 percent of thesuspended items in our sample, another 22 percent of the suspended items could alsohave been reinstated. In addition, 33 percent of the sample items contained instanceswhere it appears someone else was using the deceased individual's name and/or SSN.Our review of the earnings after death suspended items for TY 1998 also indicated that7 of the top 10 contributors to the ESF were from the entertainment industry. Better

communication with this industry could reduce the number of suspended items goinginto the ESF.

Our September 2002 report, The Social Security Administration's Employee VerificationService for Registered Employers, found that very few employers were using SSA'svoluntary EVS for registered users, with only 392 employers out of a potential 6.5 millionemployers using this service during the last 3 years. In addition, we noted that SSA didnot disclose pertinent information that could have assisted registered employers, suchas whether the submitted SSN belonged to a deceased individual or the SSN wasissued to the individual for nonwork purposes. SSA agreed with our recommendationsdesigned to assist employers and improve the EVS.

7 Internal Revenue Code section 6721 authorizes IRS to levy penalties for failure to file properlycompleted information returns, including Form W-2s.




Social Security Number Misuse and

Privacy Concerns (Identity Theft)

In FY 2002, SSA issued over 18 million original and replacement SSN cards. As use of

the SSN has grown, so has its misuse. Because the SSN is so heavily relied upon asan identifier, it is a valuable commodity for criminals. It can be obtained illegally in manyways: presenting false documentation to SSA, stealing another person’s SSN,purchasing an SSN card on the black market, using the SSN of a deceased individual,and simply creating a nine-digit number. As we have learned through numerousinvestigations, even a legally obtained SSN can be used to facilitate an unlawful act.Failure to protect the SSN’s integrity can have enormous consequences for our Nationand its citizens. Given the magnitude of SSN misuse, we believe SSA must employeffective front-end controls in its enumeration process. Likewise, additional techniques,such as data mining, biometrics, and enhanced systems controls are critical in the fightagainst SSN misuse.


In response to the terrorist events of September 11, 2001, SSA formed an executivelevel Enumeration Task Force to explore and track the Agency’s progress towardcompleting policy and procedural initiatives to further enhance the SSN’s integrity.Among the Task Force initiatives are:

· provide refresher training on enumeration policy and procedures, with emphasis onenumerating noncitizens, for all involved staff;

· convene a joint task force between SSA, INS, Department of State and Departmentof Health and Human Services’ Office of Refugee Resettlement to resolve issuesinvolving enumeration of non-citizens, including procedures for verifying INSdocuments before SSN issuance; and

· eliminate driver’s licenses as a reason for a nonwork number.

Of eight Task Force initiatives, SSA has implemented three, and five are ongoing.Other Agency initiatives include (1) agreements to enable INS and Department of Stateto collect enumeration data from aliens entering the United States, (2) a work-group to

study the feasibility of limiting the number of replacement SSN cards, (3) obtaining on-line access to State vital records so FOs can verify all United States birth certificatespresented in support of SSN applications, (4) verifying INS documents submitted bynoncitizens who apply for an SSN, (5) a workgroup to identify enhancements in theModernized Enumeration System to address certain fraud-prone situations, and (6)partnering with INS and OIG to open Enumeration Centers in large metropolitan areasto ensure that only qualified individuals with valid documents will receive SSNs.





To ensure SSN integrity in a post September 11 th environment, we believe SSA mustfocus on three stages of protection: (1) upon issuance of the SSN card, (2) during thelife of the SSN holder, and (3) upon that individual’s death. For example, all birth

records, immigration records, and other identification documents presented to SSAmust be independently verified as authentic before SSA issues an SSN. We continue toencourage full and expedited implementation of a joint Enumeration at Entry program.While this may subject the enumeration process to delays, such delays in service maybe necessary to ensure the integrity of the SSN.

Once SSA issues an SSN and it becomes an integral part of the number-holder’s life, itbecomes difficult to give the SSN the degree of privacy it requires. Businesses andgovernment agencies nationwide rely on the SSN as a convenient means of recordkeeping. By doing so, these entities collect, store, and, sometimes share a lifetime of personal information associated with the number. With this information, a criminal can

commit financial fraud, and, in some cases, camouflage other crimes. The challenge for SSA and the Congress is to find a balance between ensuring the SSN’s privacy andensuring that businesses and Federal and State agencies are not unduly limited in theprocess. Despite this challenge, the following are important steps SSA can take:

· limit the SSN’s public availability to the greatest extent practicable, without undulylimiting commerce;

· prohibit the sale of SSNs, prohibit their display on public records, and limit their useto valid transactions; and

· enact strong enforcement mechanisms and stiff penalties to further discourage SSNmisuse.

Finally, SSA must do more to protect the SSN after the SSN holder’s death. SSAreceives death information from a wide variety of sources and compiles a Death Master File, which is updated monthly, transmitted to various Federal agencies, offered for saleto the public, and available for access over the Internet. Accuracy in this area is criticalto SSA in the administration of its programs, to the financial services industry, and to theAmerican people.

Full implementation of ongoing and planned initiatives and continued vigilance in this

area is necessary to ensure the SSN’s integrity. We understand the Agency has adifficult task in balancing service and security. However, SSA must continuously reviewits systems and processes for opportunities to prevent the possibility that individualsmisuse SSNs to commit or camouflage criminal activities.




Integrity of the Representative Payee Process

Congress granted SSA the authority to appoint representative payees to receive andmanage OASDI and SSI payments for beneficiaries deemed incapable of managing or directing the management of their finances. A representative payee may be an

individual or an organization. Representative payees are responsible for managingthese payments in the recipients’ best interest, and organizational representativepayees may receive a monthly fee from beneficiaries for their service. There are about5.4 million representative payees who manage the benefits of about 7.6 millionbeneficiaries. SSA has experienced problems with representative payees who havemisused beneficiary funds, and we have identified weaknesses in the selection,monitoring and accountability of representative payees.


SSA has recognized the vulnerabilities and weakness with the integrity of therepresentative payee process. In FY 2000, SSA established a Representative PayeeTask Force to address them. The Task Force performed a comprehensive review of thefeatures and vulnerabilities of the Representative Payment Program. The Task Force iscomprised of three subgroups: (1) monitoring representative payees; (2) systemssupport for the Representative Payment Program, and (3) bonding and licensing of representative payees. As a result, SSA developed a representative payee monitoringprogram, consisting of site reviews of all representative payees receiving a fee, allvolume organizational representative payees (serving over 100 beneficiaries), and allindividual representative payees serving 20 or more beneficiaries. This routinemonitoring system is on a 3-year cycle. In addition, SSA will conduct random reviews of a sample of volume organizational and representative payees receiving a fee. Further,

in response to certain “trigger” events, SSA will review organizational representativepayees as needed. Such “trigger” events include third-party reports of misuse,complaints from vendors for failure to receive payment, or failure to complete the annualRepresentative Payee Report. Additionally, SSA annually verifies the required licenseor bond for all representative payees receiving a fee, and visits payees receiving a fee6 months after their initial appointment to ensure they fully understand their duties andresponsibilities.

In March 2001, we alerted SSA to a condition whereby individuals were serving asrepresentative payees who also had representative payees to manage their own SocialSecurity benefits. SSA subsequently implemented a program to identify and investigate

these situations. We also identified 121 representative payees whose own benefitpayments were stopped by SSA because they were fugitive felons or parole or probation violators, but who managed over $1.4 million in Social Security funds for 161 beneficiaries. In response to our audit, SSA agreed to review these cases andreevaluate whether these fugitives are suitable payees. SSA also established aworkgroup to develop processing instructions for handling this workload. SSA is alsoworking to make the Representative Payee System—which SSA uses to appoint andmonitor representative payees—more reliable.





Although SSA has recognized the need to strengthen its selection and oversight of representative payees, we continue to identify problems with SSA’s oversight of representative payees. Since FY 2001, we have performed 13 financial-related audits

of representative payees. Our audits identified deficiencies with representative payees’financial management and accounting for benefit receipts and disbursements;vulnerabilities in the safeguarding of beneficiary payments; poor monitoring andreporting to SSA of changes in beneficiary circumstances; inappropriate handling of beneficiary-conserved funds; and improper charging of fees. Some of the areas inwhich SSA needs to take action are.

§ Selection of representative payees – SSA is exploring ways to strengthen theselection process. SSA awarded a contract to research the feasibility of conductingcriminal and/or credit background checks for the corporate officers and fiduciaries inpotential fee-for-service representative payees and is considering a contract to

investigate the financial soundness of prospective and existing fee-for-servicerepresentative payee organizations. However, SSA has not issued any policychanges on the selection of representative payees.

§ Representative Payee System – We have noted the following weaknesses in theRepresentative Payee System: (1) system alerts were not always worked becausethey were given low priority; (2) ineffective tracking of representative payees who donot complete annual Representative Payee Reports; (3) inability of SSA to locateand retrieve completed Representative Payee Reports when needed; and(4) information lacking for some representative payees, and beneficiaries who haverepresentative payees, as required by law.8 SSA has said that it is working to

correct these deficiencies.

§ Bonding and Licensing of representative payees – SSA’s policy specifies neither theamount of bond necessary to adequately protect beneficiaries nor the type or natureof licenses that are required. To date, SSA has not revised its policy to addressthese vulnerabilities.

We have also recommended that SSA explore the use of Stored Value Cards9 to helpaddress systemic weaknesses in it’s Representative Payment Program. SSA believesthat Stored Value Cards would be time-consuming and labor intensive for representative payees, and that they would not allow SSA to better monitor

representative payees. However, SSA is committed to improving the Representative

8

The Omnibus Budget Reconciliation Act of 1990 required the development of a system to store dataabout all representative payees and the beneficiaries for whom they serve.

9 A Stored Value Card is a prepaid spending card that can be used everywhere a credit card is accepted.Stored Value Cards do not have a line of credit and can be used to make automated teller machinewithdrawals.




Payment Program and is exploring other innovative approaches for monitoringrepresentative payees.



IG Statement on SSA’s Major Management Challenges

AppendicesAPPENDIX A – Acronyms

APPENDIX B – Related Office of the Inspector General Reports

APPENDIX C – Office of the Inspector General Contacts




Appendix A

Acronyms

CDI Cooperative Disability InvestigationDACUS Death Alert, Control, and Update System

DDS Disability Determination Services

DI Disability Insurance

E-government electronic government

ESF Earnings Suspense File

EVS Employee Verification Service

FO Field Office

FY Fiscal Year

GAO General Accounting Office

IRS Internal Revenue Service

INS Immigration and Naturalization Service

OASDI Old-Age, Survivors and Disability Insurance

OCSE Office of Child Support Enforcement

OIG Office of the Inspector General

OMB Office of Management and Budget

SSA Social Security Administration

SSAB Social Security Advisory BoardSSI Supplemental Security Income

SSN Social Security number

TY Tax Year



IG Statement on SSA’s Major Management Challenges B-1

Appendix B

Related Office of the Inspector General Reports

Management Challenge Area, Report Title andCommon Identification Number

ReportIssued

Fraud Risk

Controls to Prevent Supplemental Security IncomePayments to Recipients Living in Foreign Countries(A-01-02-12013)

September 13, 2002

Management Advisory Report: Social Security Administration Employees with Title XVI Overpayment

Write-offs (A-04-99-64005)

September 12, 2002

Review of Internal Controls for the Supplemental Security Income Immediate Payment Process (A-05-00-10045)

September 10, 2002

Congressional Response Report: Integrity of theSupplemental Security Income Program (A-01-02-22095)

August 8, 2002

Improper Payments

Impact on the Social Security Administration's Programs When Auxiliary Beneficiaries Do Not Have Their Own Social Security Numbers (A-01-02-22006)

September 20, 2002

Effectiveness of the Social Security Administration's DeathTermination Process (A-09-02-22023)

September 17, 2002

The Social Security Administration Can Recover Millions inMedicare Premiums Related to Retirement or Disability Payments Made after Death (A-08-02-12029)

July 3, 2002

Controls Over the Social Security Administration’s Processing of Death Records from the Department of Veterans Affairs(A-01-01-21038)

February 27, 2002

Congressional Response Report: Select Social Security Administration Stewardship Efforts and Reported Savings(A-08-02-22028)

November 14, 2001

Social Security Administration's Management of Its Federal Employees' Compensation Act Program (A-13-99-91003)

October 25, 2001

Systems Security

Information System Controls of the Social Security Administration's Representative Payee System (LimitedDistribution) (A-44-01-31051)

September 30, 2002





ReportIssued

Management Advisory Report: Social Security Administration'sData Exchange with Other Agencies (Limited Distribution)

(A-14-02-12037)

September 26, 2002

The Social Security Administration's Compliance with theGovernment Information Security Reform Act (LimitedDistribution) (A-14-02-12042)

September 12, 2002

Review of Security over Remote Access to the Social Security Administration's Main Processing Environment (LimitedDistribution) (A-14-01-11010)

May 1, 2002

Service Delivery

Social Security Administration's Management of Congressional

Inquiries (A-13-02-12011)

September 23, 2002

Internal Control Review of the Office of Earnings OperationsProcessing of Remittances and Handling of Mail (LimitedDistribution) (A-15-01-21030)

August 9, 2002

Case Folder Storage and Retrieval at the Social Security Administration's Megasite Records Center (A-04-99-62006)

August 1, 2002

Congressional Response Report: Washington, D.C., Office of Hearings and Appeals (Limited Distribution) (A-13-02-22070)

July 31, 2002

Performance Measure Review: Reliability of the Data Used toMeasure Electronic Service Delivery (A-14-01-11032)

July 30, 2002

Human Capital

Follow-up Evaluation of the Use of Official Time for Union Activities at the Social Security Administration (A-13-01-11005)

June 26, 2002

Congressional Response Report: The Social Security Administration's Policies and Procedures Concerning the Rural Development Act of 1972 (A-13-02-22065)

April 29, 2002

Performance Management and Data Reliability

Performance Measure Review: Reliability of the Data Used to

Measure the Supplemental Security Income Non-Disability Redeterminations Completed (A-02-99-11003)

August 5, 2002

Performance Measure Review: Assessing the Methodology Used to Determine the Number of Hearing Cases Processed Per Work Year (A-06-01-11037)

August 1, 2002

Performance Measure Review: Increase in the Number of Disabled Beneficiaries Who Are Working (A-01-01-11022)

May 31, 2002

Performance Measure Review: Reliability of the Data Used to April 17, 2002





ReportIssued

Measure the Office of Hearings and Appeals Decisional Accuracy (A-12-00-10057)

Performance Measure Review: Reliability of the Data Used toMeasure Employer Satisfaction (A-02-01-11012)

April 15, 2002

Performance Measure Review: The Social Security Administration’s Transition Planning (A-02-01-11014)

March 27, 2002

Performance Measure Review: Reliability of the Data Used toMeasure the Quality of the Social Security Administration’sResearch (A-02-01-11011)

March 8, 2002

Performance Measure Review: Reliability of the Data Used toMeasure Public Knowledge of the Social Security

Administration (A-02-01-11015)

February 7, 2002

Performance Measure Review: Reliability of the Data Used to

Measure Anti-Fraud Performance (A-02-01-11013)

January 14, 2002

Performance Measure Review: Reliability of the Data Used toMeasure Disability Claims Processing (A-02-00-10017)

November 6, 2001

Performance Measure Review: Reliability of the Data Used toMeasure the Timely Processing of Disability Insurance Claims(A-02-99-11001)

October 2, 2001

Management of the Disability Program

Congressional Response Report: Huntington, West Virginia,Office of Hearings and Appeals (Limited Distribution)

(A-13-02-22090)

August 28, 2002

Continuing Disability Reviews for Supplemental Security Income Recipients Approved Based on Low Birth Weight (A-01-02-12031)

June 26, 2002

Status of Social Security Administration's Disability ProcessImprovement Initiatives (A-07-00-10055)

June 18, 2002

Performance Measure Review: Reliability of the Data Used toMeasure the Office of Hearings and Appeals Decisional

Accuracy (A-12-00-10057)

April 17, 2002

Follow-up Review of SSA’s Implementation of Drug Addictionand Alcoholism Provisions of Public Law 104-121

(A-01-01-11029)

December 17, 2001

Assessment of the Electronic Disability Process(A-14-01-11044)

October 22, 2001

Integrity of the Earnings Reporting Process

The Social Security Administration's Employee VerificationService for Registered Employers (A-03-02-22008)

September 12, 2002





ReportIssued

Effectiveness of the Social Security Administration's Earnings After Death Process (A-03-01-11035)

August 19, 2002

Effectiveness of the Social Security Administration'sDecentralized Correspondence Process (A-03-01-11034)

July 3, 2002

Management Advisory Report: Recent Efforts to Reduce theSize and Growth of the Social Security Administration'sEarnings Suspense File (A-03-01-30035)

May 24, 2002

Social Security Number Misuse and Privacy Concerns (Identity Theft)

The Social Security Administration Continues Assigning Original Social Security Numbers To Foreign-BornIndividuals Who Present Invalid Evidentiary Documents

(A-08-02-12056)

August 22, 2002

Congressional Response Report: Noncitizen Enumerationat the Social Security Administration's Rochester, MinnesotaField Office (A-03-02-22078)

June 18, 2002

Management Advisory Report: Social Security Number Integrity: An Important Link in Homeland Security (A-08-02-22077)

May 9, 2002

Work Activity for Social Security Numbers Assigned for Nonwork Purposes in the State of Utah (A-14-01-11048)

March 29, 2002

Disclosure of Personal Beneficiary Information to the Public (Limited Distribution) (A-01-01-01018)

January 14, 2002

Congressional Response Report: Terrorist Misuse of Social Security Numbers (A-08-02-32041)

October 25, 2001

Congressional Response Report: SSN Misuse - AChallenge For the Social Security Administration(A-08-02-22030)

October 3, 2001

Integrity of the Representative Payee Process

Financial-Related Audit of the Denver Department of HumanServices – An Organizational Representative Payee for theSocial Security Administration (A-05-02-12024)

September 23, 2002

Financial-Related Audit of the Florida Department of Childrenand Families - District 6, an Organizational RepresentativePayee for the Social Security Administration (A-08-02-12007)

September 17, 2002

Management Advisory Report: Summary of Financial-Related Audits of Representative Payees for the Social Security Administration (A-13-00-10065)

August 5, 2002

Analysis of Information Concerning Representative PayeeMisuse of Beneficiaries' Payments (A-13-01-11004)

June 25, 2002





ReportIssued

Financial-Related Audit of A. Holly Patterson Extended CareFacility – A Representative Payee for the Social Security

Administration (A-02-02-12034)

June 18, 2002

Financial-Related Audit of the Jackson County Public Administrator - An Organizational Representative Payee for theSocial Security Administration (A-07-02-22002)

June 10, 2002

Congressional Response Report: Social Security Administration's SmartPay Program (A-13-02-22059)

November 6, 2001

Financial-Related Audit of an Individual RepresentativePayee for the Social Security Administration in Region VI (A-06-00-10063)

October 24, 2001




Appendix C

Office of the Inspector General Contacts

Mark Bailey, Deputy Director Management of the Disability Program

Walter Bayer, Deputy Director Integrity of the Earnings Reporting Process

Brian Karpe, Lead Auditor Human Capital

Jim Klein, Audit Manager Integrity of the Representative Payee Process

Tim Nee, Deputy Director Performance, Management and DataReliability

Frank Nagy, Deputy Director Service Delivery

Judith Oliveira, Deputy Director Improper Payments

Jeff Pounds, Deputy Director Social Security Number Misuse andPrivacy Concerns (Identify Theft)

Jack Trudel, Deputy Director Fraud Risk

Kitt Winter, Director Systems Security

For additional copies of this report, please visit our web site at http://www.ssa.gov/oig or contact the Office of the Inspector General’s Public Affairs Specialist at (410) 966-1375.Refer to Common Identification Number A-02-03-13034.



DISTRIBUTION SCHEDULE

No. of Copies

Commissioner of Social Security 1

Management Analysis and Audit Program Support Staff, OFAM 10

Inspector General 1

Assistant Inspector General for Investigations 1

Assistant Inspector General for Executive Operations 3

Assistant Inspector General for Audit 1

Deputy Assistant Inspector General for Audit 1

Director, Data Analysis and Technology Audit Division 1

Director, Financial Audit Division 1

Director, Southern Audit Division 1

Director, Western Audit Division 1

Director, Northern Audit Division 1

Director, General Management Audit Division 1

Team Leaders 25

Income Maintenance Branch, Office of Management and Budget 1

Chairman, Committee on Ways and Means 1

Ranking Minority Member, Committee on Ways and Means 1

Chief of Staff, Committee on Ways and Means 1

Chairman, Subcommittee on Social Security 2

Ranking Minority Member, Subcommittee on Social Security 1

Majority Staff Director, Subcommittee on Social Security 2

Minority Staff Director, Subcommittee on Social Security 2

Chairman, Subcommittee on Human Resources 1

Ranking Minority Member, Subcommittee on Human Resources 1

Chairman, Committee on Budget, House of Representatives 1

Ranking Minority Member, Committee on Budget, House of Representatives 1

Chairman, Committee on Government Reform and Oversight 1

Ranking Minority Member, Committee on Government Reform and Oversight 1

Chairman, Committee on Governmental Affairs 1



Ranking Minority Member, Committee on Governmental Affairs 1

Chairman, Committee on Appropriations, House of Representatives 1

Ranking Minority Member, Committee on Appropriations,House of Representatives 1

Chairman, Subcommittee on Labor, Health and Human Services, Educationand Related Agencies, Committee on Appropriations,House of Representatives 1

Ranking Minority Member, Subcommittee on Labor, Health and HumanServices, Education and Related Agencies, Committee on Appropriations,House of Representatives 1

Chairman, Committee on Appropriations, U.S. Senate 1

Ranking Minority Member, Committee on Appropriations, U.S. Senate 1

Chairman, Subcommittee on Labor, Health and Human Services, Educationand Related Agencies, Committee on Appropriations, U.S. Senate 1

Ranking Minority Member, Subcommittee on Labor, Health and HumanServices, Education and Related Agencies, Committee on Appropriations,U.S. Senate 1

Chairman, Committee on Finance 1

Ranking Minority Member, Committee on Finance 1

Chairman, Subcommittee on Social Security and Family Policy 1

Ranking Minority Member, Subcommittee on Social Security and Family Policy 1

Chairman, Senate Special Committee on Aging 1

Ranking Minority Member, Senate Special Committee on Aging 1President, National Council of Social Security Management Associations,

Incorporated 1

Treasurer, National Council of Social Security Management Associations,Incorporated 1

Social Security Advisory Board 1

AFGE General Committee 9

President, Federal Managers Association 1

Regional Public Affairs Officer 1

Total 96



Overview of the Office of the Inspector General

Office of Audit

The Office of Audit (OA) conducts comprehensive financial and performance audits of theSocial Security Administration’s (SSA) programs and makes recommendations to ensure that

program objectives are achieved effectively and efficiently. Financial audits, required by theChief Financial Officers' Act of 1990, assess whether SSA’s financial statements fairly present

the Agency’s financial position, results of operations and cash flow. Performance audits review

the economy, efficiency and effectiveness of SSA’s programs. OA also conducts short-termmanagement and program evaluations focused on issues of concern to SSA, Congress and the

general public. Evaluations often focus on identifying and recommending ways to prevent and

minimize program fraud and inefficiency, rather than detecting problems after they occur.

Office of Executive Operations

The Office of Executive Operations (OEO) supports the Office of the Inspector General (OIG) by providing information resource management; systems security; and the coordination of

budget, procurement, telecommunications, facilities and equipment, and human resources. In

addition, this office is the focal point for the OIG’s strategic planning function and the

development and implementation of performance measures required by the Government

Performance and Results Act . OEO is also responsible for performing internal reviews to ensure

that OIG offices nationwide hold themselves to the same rigorous standards that we expect from

SSA, as well as conducting investigations of OIG employees, when necessary. Finally, OEOadministers OIG’s public affairs, media, and interagency activities, coordinates responses to

Congressional requests for information, and also communicates OIG’s planned and current

activities and their results to the Commissioner and Congress.

Office of Investigations

The Office of Investigations (OI) conducts and coordinates investigative activity related to fraud,

waste, abuse, and mismanagement of SSA programs and operations. This includes wrongdoing

by applicants, beneficiaries, contractors, physicians, interpreters, representative payees, third parties, and by SSA employees in the performance of their duties. OI also conducts joint

investigations with other Federal, State, and local law enforcement agencies.

Counsel to the Inspector General

The Counsel to the Inspector General provides legal advice and counsel to the Inspector Generalon various matters, including: 1) statutes, regulations, legislation, and policy directivesgoverning the administration of SSA’s programs; 2) investigative procedures and techniques;

and 3) legal implications and conclusions to be drawn from audit and investigative material

produced by the OIG. The Counsel’s office also administers the civil monetary penalty program.